Companies & Sectors
Reliance Jio is potent but distance threat for telcos, says Edelweiss

Although, investors continue to be jittery, perceiving the anticipated launch by R-Jio as disruptive, Edelweiss said the RIL unit is unlikely to make profits till FY19. In addition, established players like Bharti Airtel and Idea Cellular are not constrained by resources and can counter any unrealistic offering by R-Jio 

 

The telecom sector in India is at a crossroads. It is facing tailwinds like waning competition, improved pricing power, data uptick and more accommodative policies on one hand and headwinds in the form of Reliance Jio's (R-Jio) entry on the other hand. "Though investors are jittery about R-Jio’s big bang launch, we firmly believe that sound operational performance will be the wind beneath stocks’ flight in the near term," says Edelweiss Securities Ltd in a research note.

 

Although, investors continue to be jittery, perceiving the anticipated launch by R-Jio as disruptive, Edelweiss said that in the near to medium term, the sector will be buoyed by tailwinds delivering better-than-expected realisations and higher volume surge (voice and data) which will counter headwinds from either the regulator or competitors.

 

Without doubt, R-Jio will be a scale player given the technology investments further bolstered by balance sheet might and robust execution record of its parent, Reliance Industries Ltd. "However, we believe, it will gain scale gradually post-launch (expected by August 2015). Even in a best case scenario, R-Jio is unlikely to make profits till FY19. Also, more established players like Bharti Airtel and Idea Cellular are in no way resource constrained and are fighting fit to counter any unrealistic offerings," the report added.

 

According to Edelweiss, limited competition and price discipline would ring in benefits for telecom companies over the next few years. Post 2012 auctions, the competitive landscape has narrowed dramatically with only about 5 operators per circle versus around 11 earlier. This proved a boon for the industry, enabling operators to regain their pricing mojo. Further, in order to help the sector stand on its feet the new government is likely to adopt a more accommodative stance.

 

"Moreover, we expect the industry to adopt a disciplined approach, unlike the earlier price hike regime wherein discounts and promotions had wreaked havoc. Thus, higher tariffs will boost cash flows and reduce net debt of companies. In case of Bharti and Idea we estimate cash flows of Rs64,700 crore and Rs16,700 crore, respectively, over FY15-20," the report added.

 

According to Edelweiss, limited competition and price discipline would ring in benefits for telecom companies over the next few years. Post 2012 auctions, the competitive landscape has narrowed dramatically with only about 5 operators per circle versus around 11 earlier. This proved a boon for the industry, enabling operators to regain their pricing mojo. Further, in order to help the sector stand on its feet the new government is likely to adopt a more accommodative stance.

 

"Moreover, we expect the industry to adopt a disciplined approach, unlike the earlier price hike regime wherein discounts and promotions had wreaked havoc. Thus, higher tariffs will boost cash flows and reduce net debt of companies. In case of Bharti and Idea we estimate cash flows of Rs64,700 crore and Rs16,700 crore, respectively, over FY15-20," the report added.

User

Nifty, Sensex to rally further – Thursday closing report

Nifty has to remain above 7,920 for the rally to continue

 

We had mentioned in Wednesday’s closing report that the CNX Nifty may rally, subject to the Nifty staying above 7,875. Today the benchmark opened higher and managed staying above this level for the entire session. With today’s gains the S&P BSE Sensex covered up losses of the past three trading sessions, while the Nifty covered up almost all the losses of the past three sessions.
 
The Sensex opened at 26,394 while Nifty opened at 7,887. The indices hit their intra-day low close to their opening marks. The benchmark indices made a gradual move upwards throughout the session. After hitting a high at 26,689 and 7,972 the Sensex closed at 26,637 (up 390 points or 1.49%), while Nifty closed at 7,961 (up 118 points or 1.50%). India VIX fell 6.78% to close at 13.1550.
 
The markets are now awaiting data on industrial production for August 2014, which will be given out on Friday.
 
India will attract the highest-ever inflow of foreign direct investment (FDI) in the current fiscal on the back of a slew of policy reforms announced by the new government, a senior Department of Industrial Policy and Promotion (DIPP) official has said. Atul Chaturvedi, the Joint Secretary in the DIPP said the highest ever FDI flows received by the country were in FY12 at $35.12 billion, while in four months of this fiscal alone we have crossed $10.75 billion. 
 
The government has notified rules for minimum 25% public shareholding in listed state-owned firms. To comply with these norms, over 30 listed PSUs will need to raise their public shareholding to a minimum of 25% by August 21, 2017, as per a notification for amendment to the Securities Contracts (Regulation) Rules.
 
World food prices fell to their lowest since August 2010 in September, as prices of all major food groups except meat dropped, led by a sharp decline in dairy and sugar prices, the UN's food agency said on Thursday. The Food and Agriculture Organisation's (FAO) price index, which measures monthly price changes for a basket of cereals, oilseeds, dairy, meat and sugar, averaged 191.5 points in September, down 5.2 points or 2.6 per cent from August. The figure was 12.2 points or 6.0 per cent below September 2013.
 
Den Networks which had been falling for three consecutive sessions ending 7 October 2014, since the news of resignation of its CEO SN Sharma due to personal reasons, has gained in the past two sessions (including today). The stock was among the top two gainers in ‘A’ group on the BSE as it rose 11%. 
 
Rasoya Proteins (4.91%) was the top loser in the ‘A’ group on the BSE. The stock hit its 52-week low today. 
 
BHEL (8.37%) was the top gainer in the Sensex 30 pack. Wipro (0.83%) was the top loser among the Sensex 30 stocks. The stock hit its 52-week high on 7 October 2014.
 
US indices closed in the green on Wednesday.
 
Minutes of September's Federal Open Market Committee meeting reaffirmed the central bank's intent to be prudent in raising interest rates.
 
The influential US monthly non-farms payroll data of September 2014 is due on 10 October 2014.
 
The IMF and World Bank begin their annual meetings in Washington tomorrow, 10 October 2014 as finance ministers and central bankers from around the world discuss ways to bolster the global economic recovery and weather the latest bout of geopolitical instability while lifting incomes in poor countries.
 
Except for Nikkei 225 (0.75%) all the other trading Asian indices closed in the green today. Hang Seng (1.17%) was the top gainer.
 
Japanese core machinery orders rose for the third straight month in August, the government said today. The 4.7% rise in August follows monthly gains of 3.5% in July and 8.8% in June, after a record 19.5% drop in May.
 
European indices were showing a mixed performance in today's trading session.
 

User

553 applicants for three posts of Information Commissioner!

While the post of Chief Information Commissioner under RTI lies vacant, 553 applicants, including bureaucrats, government officials, retired defence personnel and citizens are eying to grab one of the three new posts of Information Commissioner

 

Despite the Narendra Modi-led Bharatiya Janata Party (BJP) promising transparency in its election manifesto, the post of the Chief Information Commissioner under the Right to Information (RTI) Act has remained vacant for nearly 50 days. In the meanwhile, the Department of Personnel and Training (DoPT) has received 553 applications for three posts of Central Information Commissioners. These applications have come from government officers, former armed personnel and citizens.

The list of applicants includes names of former DoPT Secretary- Dr Shyamal Kumar Sarkar, Dr Anuradha Verma (this name had figured in the past as a shortlisted candidate), some RTI activists, journalists and members of non-governmental organisations (NGOs), says RTI activist Commodore Lokesh Batra. Batra had filed an RTI application to know the details of applications received.

While the Chief Information Commission (CIC) is headless since 22nd August, waiting for the President and Prime Minister to install a new person at the helm, the DoPT had in February and July 2014 sought applications for the appointment of “more information commissioners in the CIC”, although it did not mention the number of vacancies at that point of time.

Delhi-based Batra requested information regarding the total number of applications received by the DoPT for Information Commissioners (IC) posts in the CIC, total number of vacancies of ICs required and the names of applicants who have applied for the IC posts.

 

See the entire list of 553 names below...

List of Applicants Applied for IC

 

In the meanwhile, RTI activists across the country are fuming over the Modi government’s lethargy in appointing a new Central Chief Information Commissioner (CCIC), who is crucial for transparency and informed citizenry. They have been questioning the use of filling up the information commissioners’ post without appointing the CCIC.

Batra, who has demanded an inspection of files which contain correspondence related to the post of the CCIC says, "The absence of 'Chief Information Commissioner' in the 'Central Information Commission' (CIC) is adversely affecting the functioning of the CIC because he is also responsible and accountable for administration and management of the Commission. Also, there is no provision in the act for "Officiating" or an “Acting Chief Information Commissioner.”
 
Section 12 (4) of the RTI Act, 2005 clearly says: "The general superintendence, direction and management of the affairs of the Central Information Commission shall vest in the Chief Information Commissioner who shall be assisted by the Information Commissioners and may exercise all such powers and do all such acts and things which may be exercised or done by the Central Information Commission autonomously without being subjected to directions by any other authority under this Act."

RTI activists Anjali Bhardwaj, Nikhil Dey and Amrita Johri have launched an online petition appealing to Prime Minister Narendra Modi to appoint a CIC at the earliest. The petition appeals to Modi to appoint a CIC immediately.
The appeal states:

 

You could sign the petition here.

While the union government is hiding behind the excuse of the absence of a leader of opposition, is it that the BJP has someone in mind and are waiting for him or her to retire? Like it happened in the case of Maharashtra when the post of the state chief information commissioner (SCIC) was left vacant for eight months until Ratnakar Gaikwad retired as chief secretary and then was appointed as SCIC!

(Vinita Deshmukh is consulting editor of Moneylife, an RTI activist and convener of the Pune Metro Jagruti Abhiyaan. She is the recipient of prestigious awards like the Statesman Award for Rural Reporting which she won twice in 1998 and 2005 and the Chameli Devi Jain award for outstanding media person for her investigation series on Dow Chemicals. She co-authored the book “To The Last Bullet - The Inspiring Story of A Braveheart - Ashok Kamte” with Vinita Kamte and is the author of “The Mighty Fall”.)
 

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)